Our new estimates indicate that in 2009, the state of Michigan
ranked 10th in the nation* in smuggled cigarettes as a percentage of
total in-state cigarette consumption — 26 percent. The five smuggling
destination states with the highest cigarette smuggling rates were
Arizona (51.8 percent of the state’s total consumption); New York
(47.5 percent); Rhode Island (40.5 percent); New Mexico (37.2 percent);
and California (36.3 percent).

According to our calculations, Arizona’s inbound smuggling rate was
not in the top five in 2006, yet we estimate that Arizona now has the
nation’s highest inbound cigarette smuggling rate, with over half of
all cigarette consumption coming from smuggled sources. This is
probably a function of the state’s 2006 excise tax hike, the 2009
federal excise tax hike and Arizona’s proximity to Mexico.